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As the Internet Grows Up, the News Industry Is Forever Changed

Advertising, which provides about 75 percent of the revenue of American newspapers, and 100 percent for television networks, is going online in a big way. Total Internet advertising spending in 2005, the Interactive Advertising Bureau and Pricewaterhouse Coopers reported, rose 30 percent, to $12.5 billion, and in the first quarter of 2006 reached a record $3.9 billion.

While print advertising revenue is nearly flat, advertising spending for newspapers' online editions in the same time frame shot up 35 percent. The actual revenue, at $613 million, is just a fraction of what the print version collects, but that fraction has been increasing steadily over time.

The news media's advantage in advertising is that it's a mass medium, but online users may gravitate to online-only sites for autos, real estate or jobs. Craigslist, Monster or eBay, among others, offer free listings or make comparison shopping much easier.

The competition between old-media and new-media companies for advertising dollars is not a foregone conclusion. Craigslist.com is estimated to have cost the San Francisco Chronicle $50 million in lost classified revenue in 2004. But the biggest information provider in almost every market is the newspaper, and the second biggest is the newspaper's Web site.

Readers clearly are headed online, in some cases replacing both print and television with the Internet as their main source of news.

Michael Dimock, associate director of the Pew Research Center for the People and the Press, said nobody knows yet whether the Internet simply replaces old media or creates another robust medium that could result in a larger audience.

"We've certainly tracked the traditional decline of [the audience for] newspapers, television, magazines and radio," he said. "Whether there's been a relocation of news for news, or whether the Internet creates another draw -- we don't know yet... We're trying to triangulate this year how much the Internet compensates" for the decline in traditional news media consumption. That report is due out next month, he said.

Unable to wait, the established news media are funneling money into their online sites.

News organizations are experimenting with combining print, electronic and online newsrooms with print media trying television and television newsrooms posting blogs.

NBC Nightly News is now available on the Net and on iPods. Viewers of ABC News can watch an evening newscast from that network online three and a half hours before one is broadcast on television. CBS News is posting both live video streams and archives online. CNN's Web site is among the most popular news sites online, but so is Yahoo News, which primarily republishes the work of others. The accelerating adoption of broadband Internet access, which hampered online video for years, is making it easier for television to stream its signature work to consumers.

It's working so well that more and more adults who are already online say they prefer the Internet to television screens or newsprint. Thirty percent of Americans say they are spending less time with newspapers and magazines because of the time they're spending online; 13 percent watch less TV and 19 percent listen to less radio. A year-old report from JupiterResearch says that more than 26 percent of online adults turn to the Web for national and international news, up from 19 percent in 2001.

The Future

There's no question that the Internet has changed the news industry in the past decade. Old media has learned that simply shoveling content from one medium to the Web doesn't work, any more than reading a newspaper into a TV camera capitalizes on the strength of that medium.

Technology has driven behavioral changes, as reporters, producers, photographers and editors learn that interactivity in the form of e-mail, blogs, polls, hyperlinks, Videologs, podcasts and news delivered via cell phones can open their work up to a newer and bigger audience, for better or worse. It's far easier for a reader to find a reporter now than it was in the past; it's also easier for a story published overseas or in a local or regional outlet to have a bigger impact. No longer are readers or viewers bound by network broadcast schedules, the delivery of a newspaper or magazine or the top-of-the-hour radio headlines.

What worries professional journalists above all else is whether what replaces the newsroom of today will support the journalism of tomorrow.

"The question no longer is whether the newspaper will endure, but whether the kind of news that is essential to a functioning democracy will survive," says Melvin Mencher in the current Nieman Reports, one of many places where journalists are worrying over the future of their profession.

That news, the kind that reveals secret prisons in Eastern Europe or government eavesdropping on telephone calls or the danger of badly built levees in a hurricane-prone area, is expensive, takes time and causes trouble. The audience for it is sometimes small and it's not easy to sell to advertisers. Right now, almost no online news sites invest in original, in-depth and scrupulously edited news reporting.

For now, newsrooms are trying to find the ideal balance between providing the instant and interactive news that readers clearly crave and the serious, in-depth journalism that makes a difference in society. Business managers are trying to increase online advertising revenue without cannibalizing the ad income for the original publication. Executives are trying to foresee the shape of the industry and calculate how to beat everyone else there. And consumers, for the moment, have the best of all worlds.


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